tv The Kudlow Report CNBC March 3, 2010 7:00pm-8:00pm EST
plan to cut spending and payroll taxes to promote jobs and growth. and, oh, by the way, the feds beige book showed a rise in economy. keep up alive, folks, keep up alive. fasten your seat belts. "the kudlow report" begins now. good evening, everyone. i'm larry kudlow. welcome back to "the kudlow report" where we believe the free path to capitalism is the path to prosperity. president obama spoke today on obama care. and the message is game on, jam it through, virtually nothing for republicans that i heard. with all the massive entitlement spendings and tax hikes on investors to regulate and control prices and rash and care
and slam the insurance companies, and frankly, redistribute income. basically take a giant, big-income step that the country doesn't want. in particular, i want to note as i have in the past, that the 2.9% payroll tax on all forms of investment on top of the repeal of tax cuts could have a very damaging effect on the staff, jobs and the economy next year. if you tax capital, you're taxing workers, wages and growth, and if you tax something more, you're going to get less of it across the board. right now, in my judgment at least, the stock market is struggling with these high-tax consequences and high-tax threats as investors try to peer into the future, which, unfortunately, is frought with uncertainty. by the way, the takeover of the health care sector will corrupt one of the biggest job sectors in the country.
health care produced thousands of new jobs while overall payroll fell. think about that. politically, the country is against this. the country does not want reconciliation, a mere 51 votes to take over 21% of the economy. the country is opposed to the congress for doing this. these are what every single poll shows. and interestingly, a recent gallop poll shows their health insurance is either good or excellent. folks don't want uncle sam to get between them and their doctors or get between them and their health care insurance. this new, great deal or new, great society, or whatever it is, it is selling a product that the rest of the country doesn't want to buy, but that doesn't mean it won't pass. a 51% majority is possible. that's the uncertainty that investors are facing. health care, by the way, today was the worst-performing stock
market sector. but you know me. on a more optimistic note, i will say this. the cyclical recovery continues. the ism non-manufacturing services report, very strong, including a hike in jobs. and the feds' beige book did show an improving economy. so we're still in a cyclical recovery, at least for this year, but to use our laugher's phrase, the question is whether a tax and spin train wreck might hit us next year. i'm hoping a political revolution next november will help us get out of this mess. i'm trying to be optimistic to the end. i just hope it's not the bitter end, for the full round-up of the president's health care push today, let's go to our chief correspondent john horiwitz. what do you make of this? >> what we've seen today is the final push of democrats to try to get off the floor since the
senate election and do what they tried to do before massachusetts. the bipartisan summit, which was really about rounding up votes from democrats, was part of that process, and today the president took the next step having recommended a few gestures for republicans in a letter to congress yesterday, he came out of the east room of the white house and said, it's now time to act. >> the american people want to know if it's still possible for washington to look out for their interests and their future. they are waiting for us to act. they are waiting for us to lead. as long as i hold this office, i intend to provide that leadership. i do not know how this plays politically, but i know it's right. >> larry, the obama white house would say you're dead wrong to characterize this as not containing any republican ideas. it's true they're not going to get any republican votes for the plan, and the elements in the letter the president released yesterday are not very
significant. however, the core component of this plan is an individual mandate to create a marketplace for private insurance. that is what john chafey proposed to the clinton plan in 1993 and mitt romney may be the republican nominee in 2012 against obama, larry. >> your facts are right, but i think mr. romney is not going to run in that. one of the things that troubles me is in this entitlement to subsidize insurance, is actually goes up to eligibility, a family of four earning $96,000. $96,000 would actually be eligible for this entitlement. john, i know you're an old deficit hawk, and probably more than i am. that is nothing, if it's not a new middle class entitlement. i just don't think we can afford it. i think that's one of the big nuts in this bill, john. >> one of the questions, larry, is whether or not the cost control measures in the bill
work. it is not true to say that the bill does not attempt to control costs, it is true to say we don't know whether those measures will work. our track record for controlling cost is very poor. the cadillac tax, which is one of the key mechanisms, was delayed. you've got a bunch of other things in health system delivery reform, and the medicare commission that would have the power to restrict some spending issues, but that is a big question mark, and it's a legitimate, fill -- philosophic region why they don't want to pay for this. >> i still think we'll never control costs. then again, the third-party payer is going to be around no matter what i think. thanks very much for your reporting. a short time ago, i spoke with republican mike pence from indiana and jeff pendleton from texas. they have a new plan to control spending with a constitutional
amendment. take a listen. gentlemen, welcome back to the show. >> thanks, larry. >> time for a spending cap with teeth was your offering piece today. if ever there was an urgent time for it, this is it. let me just ask you, before we dig into the constitutional spending cap, can i get your quick comments on president obama's speech today on obamacare? i'm not sure if mike pence's opinion has changed. you tell me. >> what the american people heard today was the president doubling down on health care. it sounds like he's willing to sprinkle a few republican ideas in token form on top of it, but at the end of the day, the president has announced for -- i'm sure reasons that are striking to millions of americans -- that we have to get this done in the next two weeks, the time is up, and, you know, when it comes down to the health care choices of americans, the
role of the federal government in those most precious decisions, the american people want us to get it right, they want us to scrap the bill and start over. that's not what we heard from the president today and i'm sure millions were disappointed. >> jeff henserling, it sounds like the president is really throwing the gaunt let down on reconciliation, which "the wall street journal" called this morning an abuse of power. what do you think on the house side of the abuse of power? >> it is an abuse of power. it is an abuse of what reconciliation was meant to do which was actually to save money. if there's anything that's clear, larry, it is that the american people do not want a trillion-dollar nationalization of their health care system, which is one of the reasons that mike and i and john campbell of california had put forth the spending limit amendment right before the president can hasten
and press on the accelerator to take us over the cliff to bankruptcy. job number one in america according to the people is jobs. and critical to have a path way to fiscal sanity so investors know they're not going to get socked with crushing tax increases or high inflation. so the president just needs to put this aside, start with a clean sheet, but obviously he's not going to do it. >> mr. pence, can you talk about the spending limit amendment to the constitution that is featured in today's op-ed that you fellows wrote? >> it's just great, and it's great to follow jeb hensarling's lead on this. we've, frankly, seen there is someone missing at the table in this battle to preserve limited government and fiscal responsibility in washington, d.c., and i believe that
somebody is the american people. our spending limit amendment to the constitution of the united states would essentially take the historical average that the federal government has taken out of the economy since world war ii, which is about 20% of the economy, and it would give the american people an opportunity to put that number in the constitution of the united states and say to this congress and future congresses, that you need to find a way to live within our means, not within your means. by drawing those lines, i think it would force future congresses to make priorities, and also, larry, to pursue the kind of policies that would ensure economic growth in the 20th century. >> really, lower spending by nyack dan any academic study, when you look at all these people in the
bureau, when you look at the imf studies, when you look at the cod studies, every paper says those countries who spend less grow more. why is it that that thought has been completely lost? >> you know why that thought has been completely lost is that beyond this, you know, guy from the rural midwest, it's not lost on the american people, but it is lost on the congress. and what jeb and i wanted to make perfectly clear today, and we'll make it as the day goes forward, is if you think government spending is bad now, in one generation, we will double the amount of money that this federal government takes out of this economy. the american people deserve to know that. we've created the freest, most prosperous nation in the history of the world asking for 20 cents on the dollar. we think the american people have a right to affirm that number and demand that this and future congresses, regardless of who is in charge, will live
within their means that way. >> and jeb, your article notes that the obama budget moves a spending ratio as a share of the economy towards 25%. if you extrapolate that out a few years, let's say a 14 or $1 $15 trillion economy, you're talking close to another $1 trillion in spending. let me ask you this. constitutional amendments have to go through a lengthy process. can you walk us through that? >> typically, larry, it will take a number of years. most constitutional amendments have a seven-year time frame in which to have it ratified by the states. three-quarters of the states would have to ratify it. our amendment says there would be a five-year phase-in. i think what's important is, larry, the american people know something is amiss. we want to start the national debate on, number one, should there be a limit to the size of g government in a free society, and if so, should it be ensli
enshrined in the american debt? we think it will have an ultimate spending on the budget in washington, and ultimately the people will be heard, and they'll be heard as early as november. >> the washington poll a few months ago, 58 to 38%, people want smaller government and fewer services. it seems to me the whole backbone and thrust of the whole tea party movement, which i call free market populism, is to stop the spending. can you get a down payment on your constitutional amendment in the form of some kind of amendment earlier that congress could have a congressional spending limitation as per years ago, the grand ruddman bill, or gingrich congress in the middle
19d 1990s. while you fight for the constitutional amendment process, can you get a down payment on an actual congressional law? >> well, larry, i'm working on that as well along with paul ryan. i have authored the spending deficit debt control act, which would have binding caps on the growth of government, it would have binding caps on mandatory spending, binding caps on discretionary spending, binding caps on the debt and deficit, but it is statutory. and unfortunately, as wonderful as grant ruddman was, there came a time when congress decided they couldn't live with it and they put it aside. same thing with the budget act, that's why you need a constitutional amendment. but we are working on, frankly, a multiple-front strategy, and we're trying to get the binding caps in sooner, or we're going to wake up and find that we're france without the wine, the museums and the sauces. >> so mike pence, i'm going to give you the last word, sir.
jim bunning couldn't even keep pago going for one week in the senate, which just blows my mind. you guys note in here, if we don't cut spending, tax rates are going to explode. that's my last question. >> that's right, and some estimates are taxes are going to have to double just to keep pace with the projected growth of government without obamacare 2.0, without more stimulus spending. the reality is that the american people are going to face some pretty difficult choices in the future, either much higher taxes, deep, deep cuts down the road in pramograms that are important to americans, or, worst-case scenario maybe above all, is inflated dollars, diluting the currency. we believe the american people are looking for answers from washington, d.c. they're looking for a way to take the reins back on spending in washington, the spending limit that would end spending to 20% of the economy.
this is how the american people can say to congress, this far, and no farther. and judging from the response we've been getting from around the country today, given time, the spending wield limit is a part of that. at the same time, we get ten years to enact the state, and the congress five years for implementation, but remember, the very debate of a balanced budget amendment in the 1980s set the stage of the balanced budgets in the 1990s. you start seeing state legislatures move on this, the congress debate, this 20% spending limit, i guarantee you that the congress of the united states will get the message from the american people and it will have an immediate effect on fiscal spending. >> thank you both, you're terrific. >> thank you, larry. >> a spending limit. there's a great idea. coming up on the program today, did president obama really say anything new in his
obamacare speech? is there really anything new for republicans? still to come, my exclusive interview with the new republican tea party senator from massachusetts, that being scott brown. you heard me right, a republican from massachusetts. he's looking to cut your taxes. stay tuned. you're watching cnbc first in business worldwide.
so is obama's speech today a game changer or was tt same thing? welcome back to the program. i just want to go to this issue of reconciliation. president obama clearly threw down the gauntlet of reconciliation would amount to a government take over of 20% of the economy. mr. obama had a different message back in 2007. take a lircsten, please. >> this is an area where we'll have to have a 60% majority in this house and the senate to get a bill to my desk.
we'll have to have a majority to get a bill to my desk. that's not just a 51% majority. >> that's clearly a flip-flop from one of his campaign promises. why do you think he's gone the reconciliation route? >> actually, there is another tape where he's called it a hijacking of the whole political process. the american people have spoken very clearly about this. the american people have rejected this bill. half of america wants this to just stop and start over. a quarter of us want to just stop completely and only one in four americans support this bill. so the president knows there's no way he's going to get the sort of bipartisan support he hopes for, but it's his own fault because the bill is not a bipartisan bill. it's a government-run program. it's going to cut medicare by $500 billion, it's going to cut people that are depending on medicare off of their ability to get that care they need, it's
going to have a huge impact by raising taxes, and people who have a plan they like, their costs are going to go up, and they know it. >> senator, two things that go together and really trouble me in this. i don't see how you get around this. number one, as you said, taxes are going up. for the first time in history now, the payroll tax on medicare will be applied to investments. all right? not just the income tax that you're going to pay, anyway, but it's going to go to tax dividends, capital gains, in annuities and other things. that could be damaging to growth. but it's going to be used to finance this middle-class entitlement. according to reports, up to $96,000 income-earning family -- $96,000 -- would be eligible for this insurance entitlement from the government. now, since when does this country go down that kind of route for a huge, new, middle-class entitlement when we're already bankrupt on social security and medicare.
i don't get it. >> and we should. look what warren buffett said on monday. he said, eliminate the 2,000 pages, eliminate the nonsense and focus on cost. that's the big problem here. we've got to get the costs under control. people are happy with the care they receive, the quality of care, available care. the big problem that most of america is concerned about is the cost of care, and i think this bill completely fails to address that. it is a failure in that regard. >> well, bend in the cost curve, and i think this is where warren buffett was going, because mr. buffett is a smart guy. until we get rid of this third-party payer free lunch, we're never going to control costs. that's always been my view. that was milt on friedman's view years ago. government payers, business payers, until we give the tax breaks to the other families, how will we ever use health
market choice and competition to ever bend the cost curve down. nobody wants to go there. >> because right now, as you know, about 7 to 8 health care dollars are not out of the patient's pocket directly. i saw that practicing orthopedic surgery for 25 years in wyoming, i was at the hospital in wyoming just this monday talking with patients, talking with doctors, and when patients focus on the fact that insurance is paying for things, they ask the doctor, will my insurance cover it? only when they say no do they say, what will it cost? i think americans are very smart when it has to do with their money but not government money or insurance money, and that's the focus. you have to have folks in the game, how it impacts their own pocket books. >> i gather mr. obama did not persuade you today. let me ask you this. vote in the senate. he needs 50 votes, 50 votes and then mr. biden will break a tie. can he do it?
a lot of people think he can do it. >> the question really is, will it pass the house first? the first thing they need to do is try to cram this through the house, nancy pelosi trying to cram through the bill they tried to pass on christmas eve, the bill that contained the corn husker kick back and the people in florida and the louisiana purchase. that's what the folks are trying to get done, pass the christmas eve bill, whether the bribery or whatever word you want to use to get the senate to vote for that mon strosty. that's what they're trying to do, and after that becomes law, then come back. so the lawmakers have to trust themselves in the senate to do this whole reconciliation process. the bottom line is if harry reid can't get that through, the senate still would have passed into law the bill they tried to pass christmas eve. >> appreciate your comments. coming up, folks, my exclusive interview with the tea party senator from massachusetts, that being mr.
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at the heritage foundation. gentlemen, we're waiting for the president who is kind enough to speak with us between senate votes, so i appreciate you helping us out this meaning. what is your single biggest objection to obamacare? >> overall, it's the sector and mandate and new taxes, it's the burden placed on small businesses, and it's sort of the regulation of the entire insurance industry that turns the insurance industry into a regulated utility. the government is taking over a very, very large chunk of our economy. >> and david goodfriend, let me ask you, my friend, the thing that bothers me the most, i agree that we should help the chronically uninsured who can't afford health insurance. those folks deserve a helping hand. but this bill has a $96,000
limit on families of four that would qualify for this new government entitlement. david, i think that's an outrage. >> larry, i think you have to look at dollar amounts. in other words, there is a sliding scale for how much somebody needs support. let's go back to the basics, all right? you said on this show, and senator grasso did, too, that taxes matter. we're going to make sure -- you're wrong. >> it's gone. the new senate bill takes that out. >> what president obama said today is that one of the things they're going to do to pay for this -- it's all paid for it, you're not adding a deficit -- the pay-for comes in taxing economy. it brings costs down. why? then you don't get people going to the emergency room at the last minute. it is widely agreed upon. >> i'm asking you a different --
the cadillac tax kicks in, i think, at 26, 28. it's gone for budget purposes for almost ten years, but you're not answering the question. why are we granting $96,000 limitations for this government entitlement? this is something this country has never, ever done before, and once you let those horses out of the barn -- and mike frank, let me get you to weigh in because we may lose you here. if we start with this $96,000, the government is going to run everything all the time. that's the way i see it. >> larry, you're right in general. the track record the last few years has been to slowly but surely draw upper middle income families into all sorts of subsidies. everything from insurance or vacation homes to higher education to things like health care. it's across the board. >> this expands the government dole concept beyond anything that is imaginable to me, gentlemen. let me tell you, these tax
numbers and the budget numbers do not add up. there is double and triple counting. but you're going to go up from here. you start at 96,000, you'll wind up raising it. this is government control, government putting people on the dole for health care insurance like you've never seen before. >> larry, one of the reasons you saw republican leadership rein in the senator who was holding everything up on unemployment benefits, jim bunning, one of the reasons you saw that was because well-off americans right now who are out of a job are collecting unemployment. be careful, my friend. if you start picking on people who make 96,000 and say they're not worth it, be careful at the polls. i'm just saying. >> oh, nonsense, this country does not want that kind of middle class. with regard to senator jim bunning, all he said was, you want to give assistance, pay for it. the problem with this is nobody wants to pay for anything. all you're doing is expanding the dole. >> health reform is paid for.
>> your man clinton never would have signed on for it. anyway, david goodfriend, mike frank, you're very kind to help us out. we're waiting for scott brown, the tea party man from massachusetts. he's got a brand-new tax cut that he is going to unveil right here on "the kudlow report." mr. brown is in between votes, but i'm told we are going to get him soon. please stay with us. you don't want to miss it. hi, may i help you? yes, i hear progressive has lots of discounts on car insurance. can i get in on that? are you a safe driver? yes. discount! do you own a home? yes. discount! are you going to buy online? yes! discount! isn't getting discounts great?
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joining us now is the new senator from massachusetts, scott brown, and he's looking to cut taxes. senator brown, i appreciate you coming. i know you're in the middle of all these votes. thank you, sir. >> we're all done, and i appreciate your flexibility as well, larry. thank you. >> by wait, what were you voting on? anything for tax relief for us? >> actually, we were doing a little bit of pago, finding a furnding source to pay for these things in washington. i'm trying to find an
across-the-board payroll cuts for americans, to put 5 to $7,000 in their pockets to provide them with immediate relief. >> let's go into some of the details on that. one of the new wrinkles i see in your program is you actually have an idea of how to pay for it in the spirit of pago by reducing government spending. can you tell us about that. >> you told us many times the stimulus bill has not created one new job, so my plan is to use the unencumbered stimulus dollars and use that $80 billion or so to pay for the payroll tax basically cut for the ordinary people. >> so you're going to drop the withholding rates for what, six months, as i understand it, and it goes to the actual worker? it goes to the employee? >> that's correct. six months is about $100 a month, obviously. once again, people maybe in washington don't understand what money is anymore, but $100, 500 to $1,000 total for a family, i
know in my state and throughout the cities and towns throughout this country, that still has value. >> is there any income limits to this? because i know in the campaign, you were promoting across the board. is there an income limit to this, or do all people working get this? >> it's across the board, but it's 200,000 and less. >> 200,000 and less. >> that's correct. >> let me ask you this, if you get this nose under the camel's tent, as i call it, and you got it for six months, would you extend it into 2011 and 2012. >> lirsten, i'm in favor as jfk and ronald reagan called for in the campaign, tax cuts across the economy. any time we can put more money into people's pockets and take it away from the bureaucrats here is a good thing. whether we give them $500 or $1,000, sure, i'd love to do it. we just have to figure out a way to pay for it, and i believe tax
cuts actually create jobs. >> i do agree with you. you did vote for president obama's tax credit, which i believe is six months. if i'm not mistaken, his relief measure went to the business. and you think yours is better for economic growth. >> absolutely. when you're putting money directly into the economy with people going to the movies or they're investing or they're saving or they're paying tuition and oil, that's going to generate new jobs. the more people have in terms of money in their pockets, they know better what to do with it than the federal government, i can tell you that for sure. >> are you getting any co-sponsors on this? >> i know senator mccain jumped on. we had a crazy day just bouncing back and forth, and we're working on it. i'm actually meeting with some of my colleagues on both sides of the aisle a little later. i'm hopeful. and remember, i crossed the aisle last week. i made the effort with the olive branch, and i looked at a bill. it wasn't a perfect bill, but it was a good first step, and i'm
hoping that same form of bipartisan support comes my way, because this is clearly a good bill, and any senator who really doesn't want to put money in their constituents' pockets, well, their constituents can call and say, hey, i want my 500 to $1,000, because i know how to spend it better than you do. >> you basically said you want people to get more money in their pockets and you talked about the across-the-board tax cuts. let me go back to that. when you were on the program actually before your surge in the polls, we were one of the earliest to talk to you. >> you were, and thank you very much. >> no, god bless. you talked about the jfk tax cuts and the reagan tax cuts. those presidents lowered marginal tax rates across the board for individuals and businesses. will senator scott brown, as you move ahead and get comfortable and develop more lejts lags, will you go to those models of lowering tax cuts across the board for businesses in the big
bang sense. >> i know the value of a dollar. i want to make sure dollars are being stretched as much as possible before we ask the taxpayers to contribute any more money to it. any time we can do any type of tax break, i'm in favor of it, but absolutely, i would welcome an opportunity to jolt the economy, because as you pointed out, and as i've said during my campaign, this stimulus bill, since its inception, hasn't created one new net job. we lost 52,000 in massachusetts, we lost millions in the country, so why not try something a little different. go back to basics, use common sense and simple economics to put more money into businesses and corporations so they create jobs, and that will steamroll and create more jobs and more jobs, and you know the drill. >> i do know the drill, and it's music to my ears. i heard an interesting anecdote, i want to get your response. apparently carl rowe spoke at a small dinner of conservatives, i don't know whether it was last night or a few nights ago. and he said president obama put up the bank tax hike
specifically aimed at you to corner you as a greedy wall street supporter. this is what carl wolf was saying. carl wolf is a smart guy, i don't know whether it's true or not. you opposed the tax hike. president obama went there last sunday and tried to pin you as a greedy wall street supporter. you didn't take the bait and you won, anyway, going away. do you think they singled you out on this bank tax hike, and by the way, do you still oppose it? >> of course. it's going to be a pass-on to the ordinary consumers. your atm fees are going to go up, your checking account fees. by the way, those fees in the form of a tax are less money they'll have to loan to businesses and money to buy homes. listen, i'm still scott brown, i still drive the truck parked outside. i looked under the hood of that truck, and it's running really well, but the people of massachusetts don't have enough money to buy those new trucks
because of the stimulus bill and the fact it hasn't created one new net job, number one, and to do all these extra taxes in a time when people are hurting and they just can't stand it anymore, and they want us to do better, and i challenge the president to do better and put more money in people's pockets and stop taxing us to death. >> let's switch gears a little bit and talk about obamacare. when you ran in the campaign, you basically ran as the 41st vote against obamacare. first, sir, did you hear anything from the president's speech today that changes your mind on his plan. >> no, it's a regurgitation of the original senate plan, but bottom line, it still cuts half a trillion for medicare, it's going to cost a trillion dollars in massachusetts. it's going to cost us a tremendous amount of jobs. i really believe -- and this isn't political rhetoric because i've been elected -- we need to start over. the american people have said they don't like the plan, and if they try reconciliation, i can
assure you it's going to cost them in 2010 because the people do not want this -- the back room deals, all the political which chicanery, all the political maneuvers to push through a bill the people don't want. i would encourage them to start from scratch and take little steps to solve these problems one at a time instead of this total denomination of the entire industry. >> mr. obama expressly said in his speech today he wasn't going to start from scratch, and i want to ask you, given his likelihood, some would call it obsession, to jam this down the throats of the house and senate and jam this down the throats of the american public, does this become the political gift that keeps on giving? is that where this is going to go? >> that's up to the political pundits to decide, but let me tell you, i would encourage all of your viewers to call their reps and senators and say, listen, enough is enough. we do not want the political
chicanery and the political back room deals and political maneuvers to ram something through that's going to cost us tril yolions and hurt our senio and it's not the way we do business. we can do better. i'm challenging the president to do better. >> last thing, sir. you were the darling of the tea party, you were the darling of the cpac con serve tifz. those guys, they're very, very clear. they want smaller government, lower spending and borrowing, they want lower taxes, they want economic freedom. i call them free market p populous. are you comfortable in the role of a tea party leader? >> with all due respect, i don't have any particular group that i owe really anything to, because i get a wide range of support from democrats, republicans, people who call themselves tea parties. they never walked up to me and
said, hey, i'm a tea party member, i'm voting for you. they said, listen, i believe in what you're doing, i believe in what you're saying, i trust you and i want to send you down there to fight for smaller government, to fight for more money in our pockets, to fight for the health care proposal that's going to hurt jobs. so during the campaign, i said i'm a scott brown republican, and i showed it last week to reach across party lines to look at a bill with open eyes and take an independent vote. for people who are trying to claim me as their heir apparent to a particular cause, i would encourage them to speak to me first and let me know what their thoughts are because i plan to look at each and every bill in an independent way and make my own vote. >> i'm going to claim you as a great guest on t"the kudlow repor report". we really appreciate your time. >> thank you as well. coming up in "the kudlow report." some financial and economic work in our remaining moments. are we in for a double-dip
let's turn to the economy in the stock market. are we in for a double dip? maybe the stock market is actually poised for a new final leg up higher this year. we have rich carlguard and rick fitzpatrick. rich, it's interesting, you lir listen to a guy like scott brown, i get hopeful. all this talk of higher taxes and political takeovers, maybe this stuff can be turned back, rich carlguard, and maybe the stock market is poised for a leg up this year. what do you think, my friend? >> i think the market will be up 15 to 20% this year. the stallout since january 19th doesn't particularly trouble me. the last month of financial news hasn't been so good, but a lot of it is weather related. when you look beyond that, we know the weather is going to get
better. i still think obamacare is going to stall out in the house, and i think the republicans are going to take at least one or two congressional bodies come november. s so i'm positive in the long term. >> dan fitzpatrick, i've heard a lot of talk about double-dip recession. just to be mundane, the irs report was very strong. the irs on manufacturing, the seventh straight month that came out the other day, seventh straight month $1.50. even the feds' beige book showed improvement and those guys don't want to admit it. >> the problem is we can't borrow and spend money and pay more to pay for what we borrowed forever. so what we're really doing, larry, i mean, you think about it. we're borrowing a bunch of money, we meaning you and me, the taxpayer, the government, we're borrowing a bunch of money we can't pay back without
borrowing more. that's part of the reason the numbers are going up, and i think they're going to get stronger. >> you do? the economic numbers. i just want to make a little challenge before i bring rich back in. this massive deleveraging is probably three-quarters through on the consumer side. they deleverage in some counts $1 trillion of borrowing and corporations have more money than they know what to do with right now. so i'm not sure i really get this borrowing squeeze business. >> we're deleveraging as consumers, but what's happening with the government? the government is actually continuing to leverage. that's what i'm talking about as more long term, and let's not confuse thesis here -- i said thesis. short-term this year, larry, equities are going up. look what small caps are doing. small caps led the market a couple days ago. so there's every reason from an equity standpoint that we're just going to continue to get
higher stock prices because prices follow earnings. >> rich carlguard, putting the tax hikes aside, and i just have a sense all of them are going to be returned. this is a business leverage recovery, rich, and i think that's a very solid foundation for growth, at least for the next six to nine months. your last word in the 29 seconds. >> recovery is the norm. don't focus on consumer lack of confidence. >> that's why we shouldn't be taxing investment. that's why this health care plan is wrong, repaeling the bush tax cuts is wrong. if they're leading us out of the wilderness, why would we want to tax them? >> 2010 is like 1978. that's what we began to turn back all the liberalism and inflation of the '70s, so this is a good year. it's a turning point year. >> thank you, gentlemen. i appreciate it. rich carlguard and dan
that's pretty far. doc, look who's in town. ellen! copenhagen? cool, right? vacation. but still seeing patients. oh. [ whispering ] workaholic. i heard that. she said it. i... [ female announcer ] the new office. see it. live it. share it. on the human network. cisco. >> narrator: in this episode of "american greed"... two grannies in jail ... caught on tape.... their cold-blooded murder for money plot is finally up. >> jimmy covington: they already killed two men and were gonna murder me. >> their story... is about to unravel... >> ed webster: they just fed them and housed them like animals, just for the sole purpose of killing them. >> and it sounds just like something out of a hollywood movie... >> i think i still could not really get my brain nd